A Tale of Three Cities

New York’s economy is divided into three parts: upper, lower, and under. The first two—upper and lower—are old hat, retailored now to fit the service economy. The third—the underground economy—has moved from being a pest to being a pestilence. In toto, they compose a complex entity in which disparate parts live in symbiotic embrace.

The concept of a “dual economy” in the United States—an economic ghetto of vast proportions in the midst of a prosperous nation—is neither new nor peculiar to New York. Economists have named the two economies “core” and “periphery,” or “primary” and “secondary.” In the large, capital-intensive, highly mechanized, oligopolisti...